Kenya’s annual inflation rate, as reported by the Kenya National Bureau of Statistics (KNBS), stood at 3.0% in December 2024, reflecting a steady price increase compared to December 2023. This rate highlights the continued upward pressure on the cost of living, primarily influenced by rising prices in key sectors such as food and transport.
The Consumer Price Index (CPI), a key economic indicator that tracks the average change in prices paid by consumers for a basket of goods and services, showed that food and non-alcoholic beverages were among the main contributors to inflation. The prices for these items rose by 4.8% year-on-year, significantly impacting household budgets. Transport costs also saw a slight increase, edging up by 0.2% over the same period. These two categories have a direct effect on everyday living, driving the cost of essential goods and services higher.
However, not all sectors experienced price hikes. The KNBS noted a slight decline of 0.2% in the housing, water, electricity, gas, and other fuels category. This drop helped offset some of the inflationary pressure, offering a small relief for households that were grappling with rising costs in other areas. It is important to note that housing, water, electricity, gas, and fuels account for over 57% of the weights in the 13 broad categories tracked by the CPI, making this a crucial area in terms of its impact on the overall inflation rate.
Month-on-month, the CPI rose by 0.6%, from 140.81 in November 2024 to 141.66 in December 2024. While this increase is relatively modest, it further underscores the persistent upward trend in the cost of living. The continued inflationary pressure highlights the challenges faced by Kenyan households, especially those that rely heavily on food and transport.
Despite some stability in other areas, such as housing, the overall trend suggests that consumers can expect price fluctuations to continue. As inflation remains steady at 3%, households may need to adapt to ongoing changes in the cost of essential commodities, with food and transport remaining key areas of concern. Policymakers and consumers alike will need to stay alert to the evolving economic landscape as Kenya enters 2025.
